Most of us have been there. Those months where things get tighter or when unexpected expenses take over and make your financial situation seem dire. It can be awfully stressful. But there are some things you can think about and do to help your situation.
1. Try not to stress. So much more easily said than done, but psychologically worrying and stressing about money will make it worse. Worry, fear and doubt usually paralyze more than they actually help. Write your thoughts out, talk to a friend or seek some kind of financial counseling. It will be better to deal with your financial problems with a clear head.
2. Prioritize. If you can’t pay your bills, you’ll need to prioritize your bills. Personally I think food and your mortgage/rent are the most important. Remember that other bills are sometimes negotiable. If you can’t pay your credit card bills, call them and work something out. So often people will work with you if you’ll just ask.
3. Cut back. This is tough, but it’s a very easy way to take off some pressure. You don’t NEED cable or the most expensive phone package. Think about cutting back and relieving that stress. Even a couple hundred dollars a month will help a ton.
4. Plan, plan, plan! I can’t even begin to explain how much this has helped us. Anytime we’ve been in a financial bind, we feel better just planning our strategy. It also brings my husband and I closer when we can communicate about these things more.
5. Spend $10 on yourself. I know this sounds counterproductive, but “buying stuff” helps me save. The mentality of “I can’t buy this” or “I can’t afford that” is very taxing on the psyche. Sometimes something as simple as a $10 bottle of nail polish will get you through months of less spending and even cutting back. It’s purely psychological, but it helps me.
What do you do when finances get tight?
My husband and I want a king size bed. The older we get, the more children we get, the bigger the bed we need. However, we just don’t have the expendable income to get what we want right now. Buying a king size bed means a whole new frame, new bedding and if we can’t find a matching frame even a new set. It’s a pretty big expense. And after talk of financing this large purchase at zero percent for 4 years, we decided the debt wasn’t worth the purchase and we can get a little more cozy in our queen.
And why? Because debt is bad, here’s why.
1. It affects your credit. The more debt you have the more it lowers your score. This really comes into play if you’ve maxed out your credit resources. Low credit scores affect most anything you want to qualify for. Higher interest rates for poorer scores and of course a lesser probability of being approved period.
2. Debt will cost you more. That’s how debtors make their money. They don’t want you to pay off their debt. They want you to keep accruing interest and in turn make them money. So your purchases ends up costing you more.
3. It’s an endless cycle. Once you start accumulating debt, it’s hard to get out of it without a concrete plan. Most people just keep accruing it. It’s hard to stop living above your means because it usually means more self discipline and less of the “I want it now mentality.” That can be hard for a lot of people.
4. No house! My husband ran into this problem when we wanted to buy our first house and we had a lot of debt. We had more than they allowed. We had to pay it down before we could buy. Our debt was actually keeping us from our dreams of owning a home. It was a long hard road and I wish someone would have told us before we got so much debt.
5. It ruins relationships! I heard that money is the number 1 thing that couples fight about. I am sure it’s not because of an abundance, but because there’s not enough or this funds are misappropriated. Less debt will mean less arguments about money.